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Money and adult children?
Old 02-10-2012, 10:20 PM   #1
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Money and adult children?

Is inheritance to your children part of your retirement fund plan?

I've sent my only child to two college degrees and even paid for her wedding.
I also started her Roth-IRA and contributed about 3 years into it.

After that, I made it clear that she and her husband are on their own.

If I and my wife dies early, my daughter can inherit a good amount, but I intend to spend it all in my retirement. It's mine alone.

Your opinion on this?
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Old 02-10-2012, 10:31 PM   #2
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Our inheritance to our children was in giving them roots and wings. They are both gainfully employed and fiscally responsible, as well as living in their own homes.

We've told them not to expect any inheritance and know that they both contributing to 401ks and IRAs to save for their retirement.

We would love to live long and prosper, and have a nice inheritance to leave them, but it's not something we or they are planning on.
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Old 02-10-2012, 10:41 PM   #3
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Our 2 children are both married and doing well. We will be glad to leave them what ever is left when we are gone.

I won't get into what we paid for but let me say we Paid alot.
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Old 02-10-2012, 11:02 PM   #4
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I am planning to leave a substantial estate. According to FIRECalc, I have a 100% chance of that.

On the other hand, if faced with unexpected financial disasters due to such concerns as world economy collapses or grave and expensive illness, this money constitutes "Plan B".

I feel that the best thing I can do for my daughter is to not end up on her doorstep expecting her to take care of me in my old age. Beyond that, any inheritance is just gravy. She is already living a much higher lifestyle than I ever led, or could afford. Her husband seems sensible with money, and she is learning. So either way, I think/hope she'll be fine.
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Old 02-10-2012, 11:11 PM   #5
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Ours are only 8 & 6 years old and we are hoping for a retirement period that could last for 50+ years (for mrs traineeinvestor at least) - I have no idea whether there will be anything meaningful to leave them at the end of the process but hope (i) that they won't need it and (ii) there will be something meaningful to leave them and/or grand children and (iii) we will not be a financial burden to them when we get older.

Of course, if I find any more nutella stains on my favourite painting, my cat may end up with the inheritance instead of my children.
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Old 02-10-2012, 11:22 PM   #6
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We don't have children, but plan to leave our relatives our estate.

At this point, we have half going to DH's sister and soon I will put the other half in one of my cousin's name.

After a few more years go by, we'll have to put it in their children's names as we and our present beneficiaries will be too old to vote.
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Old 02-10-2012, 11:31 PM   #7
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I started a similar thread sometime ago: Intergenerational Wealth Transfer.

If we can trust FireCalc, it says I will leave my children anywhere from a few millions to tens of millions. Does that mean I am spending too little? What else do I need? Heck, I have been thinking all I really need is just this little motorhome, and little else (wife does not know about this yet). Then, FireCalc results would be even better!

Can't tell my children about this though. They would want to stop working, and to go straight into ER life along with me. Then, all that FireCalc calculation would be off! I would not have enough and would have to house the whole family in the little MH. That won't work.
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Old 02-10-2012, 11:31 PM   #8
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Originally Posted by Birchwood View Post
Is inheritance to your children part of your retirement fund plan?
Well, I don't have any kids, however I can share my parents view on this matter. My folks worked all of their lives, saving and investing to be able to live a comfortable life in their retirement. After they retired, if they wanted something they bought it. If they wanted to travel somewhere, they went. They didn't just throw their money around, but they used it to enjoy life. They always told us kids that when they got to the end of their days, whatever was left (if anything) would be left to us. But they also instilled in us that there may not be much (if anything) left.

My Mom is still very much alive and kickin', and is living quite comfortably, but she often worries about spending money on something she wants because she's worried that there won't be any inheritance left for my siblings and I. So I'm constantly having to tell her to spend it if she wants to, she earned it, and not to worry about us kids! Her and my Dad worked their tails off all of those years to be able to enjoy THEIR life, NOT just to leave an inheritance after their gone!!!

I'm not too sure my siblings would be in agreement with my stance, but I'm really not too concerned about either.
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Old 02-11-2012, 12:14 AM   #9
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Your opinion on this?
I've told my daughter that I respect her way too much to dump millions of dollars on her.

In her honor, we'll make sure that we spend it all before we croak.

Besides, according to our plan, by the time she could possibly inherit she'll already be in her 80s.
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Old 02-11-2012, 05:46 AM   #10
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Our plan is to spend our portfolio and leave little, and we are working hard at this plan. Judging by the credit card bills, we are executing very well. I doubt there will be much money left over, but if there is, the kids will get some of it.
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Old 02-11-2012, 06:34 AM   #11
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...My folks worked all of their lives, saving and investing to be able to live a comfortable life in their retirement. After they retired, if they wanted something they bought it. If they wanted to travel somewhere, they went. They didn't just throw their money around, but they used it to enjoy life. They always told us kids that when they got to the end of their days, whatever was left (if anything) would be left to us. But they also instilled in us that there may not be much (if anything) left.

My Mom is still very much alive and kickin', and is living quite comfortably, but she often worries about spending money on something she wants because she's worried that there won't be any inheritance left for my siblings and I. So I'm constantly having to tell her to spend it if she wants to, she earned it, and not to worry about us kids! Her and my Dad worked their tails off all of those years to be able to enjoy THEIR life, NOT just to leave an inheritance after their gone!!!

I'm not too sure my siblings would be in agreement with my stance, but I'm really not too concerned about either.
Boy does this sound familiar. My sister and I constantly told our folks the same thing when they were still around. They gave all us kids a good home life growing up, a start on an education so we could take care of ourselves, and valuable role models. My older brother (Silas Marner with an infatuation with money) was quite the opposite and would have prefered they spend as little as possible and leave the entire estate to him. My wife now has the same situation with her mother and older brother.
We will more than likely have a nice inheritance to leave our 2 kids but we don't plan on scrimping any more if there is something we would like to have or do.

Cheers!
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Old 02-11-2012, 07:10 AM   #12
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We've launched DD with an education and a fairly strong attitude about finances I think. We'll see. DW has told her not to expect a big inheritance. So DD is begun saving in her 401K. The less she expects from us, the better position she'll be in no matter what happens.
But the real truth is likely to be different. DD will most likely inherit quite a bit of rental property and the home place. The cost basis will reset for her, that is unless the tax code changes. And there is a pretty good chance investable assets will be left unless new medical breakthroughs come up with some way to extend life significantly.
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Old 02-11-2012, 07:17 AM   #13
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My Mom is still very much alive and kickin', and is living quite comfortably, but she often worries about spending money on something she wants because she's worried that there won't be any inheritance left for my siblings and I. So I'm constantly having to tell her to spend it if she wants to, she earned it, and not to worry about us kids! Her and my Dad worked their tails off all of those years to be able to enjoy THEIR life, NOT just to leave an inheritance after their gone!!!
Before she passed my mother also expressed the same sentiment. All three of us told her essentially the same thing: "Mom, you've paid your dues. Spend it! None of us are wealthy but we're all making it on our own and we don't need your money." So she loosened up a bit and had some fun.

As it happened there was a small inheritance but it certainly wasn't substantial so her timing was pretty good.
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Old 02-11-2012, 07:21 AM   #14
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Speaking as a daughter:
My dad passed away 10 years ago and left his savings to my mom and me. I do not plan to spend what I got as long as my mom is alive (82 and kicking). I feel that this money is more hers than mine. However, she will hardly ever need it, as she is a saver and LBYMer herself.
I am an only child and manage her finances, so I know.
I keep the inheritance in my name though, to keep estate taxes low.
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Old 02-11-2012, 07:32 AM   #15
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Besides, according to our plan, by the time she could possibly inherit she'll already be in her 80s.
Good for you! Go for it.
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Old 02-11-2012, 07:37 AM   #16
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Is inheritance to your children part of your retirement fund plan?

I also started her Roth-IRA and contributed about 3 years into it.

Your opinion on this?
Yes. They get the ira accounts to continue tax deferred.

I still fund the roth for them whenever I have some extra. I hate to leave any $ on the table that could go to them to earn tax free for the rest of their life.
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Old 02-11-2012, 08:02 AM   #17
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I still fund the roth for them whenever I have some extra. I hate to leave any $ on the table that could go to them to earn tax free for the rest of their life.
We do the same. It's not a lot of money but it is a good way to help and they will benefit when they need it most.
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Old 02-11-2012, 08:09 AM   #18
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... my mother also expressed the same sentiment. All three of us told her essentially the same thing: "Mom, you've paid your dues. Spend it! None of us are wealthy but we're all making it on our own and we don't need your money." So she loosened up a bit...
+1 My mother called last year in a panic, she needed a crown. She asked to borrow money from the three of us (her children). Of course we all chipped in to alleviate her tooth emergency. After the crisis had passed we all realized she had several investment funds that were quite large. We asked why she wasn't using them. Her response was that if she used them, there would be less to leave to us.

It took us a year to convince her, that those funds were for her to use when she needed them, for what ever reason. She finally is feeling comfortable in doing so, and she is so much more at ease with life.

In some respects, I think this is a generational thing. You know to leave a legacy of some sort. I have told our kids, there might be something left, and then again...
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Old 02-11-2012, 08:23 AM   #19
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Easy answer for us, even if the situation is difficult.

Having a (disabled) adult "child", our plan is to maximize our terminal estate value for his benefit after we're gone (no family members want to get involved).

It costs a lot for a commercial trust, lawyers, investment manager to liquidate our real/personal assets and continue his care after we're gone.

That's life. As the Stones song goes, "you don't always get what you want; if you're lucky, you get what you need."... (we're lucky).
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Old 02-11-2012, 09:15 AM   #20
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Late to the thread.

Like our parents before us, DW and I feel our obligation to our children is give then the tools and opportunity to prosper and that the rest is up to them. We paid for DD's college education and she is on her own and doing well. While DS decided not to go to college, we have told him that if he changes his mind that we will pay for ti just as we did for his sister and it is built into our financial plan, as is paying for a wedding for DW should she find a mate.

While we have told our kids not to expect any inheritance, the reality is that it is likely that they will receive a substantial inheritance, not be because we intended it, but more because of the conservatism built into our plans which is at least in part intended to make sure that we will never be a financial burden to our children. That and LBYM flows through our veins and we find it difficult to splurge other than just every once in a while.

My mother has the same issue - she could well afford to spend twice what she does and all her kids have told her to spend more and enjoy the rest of her life, but she chooses not to do so. I'm trying to avoid the same "trap", but it is hard going from being a saver to being a spender.

If DW and I go out to dinner with my Mom and she offers to pay the tab as she frequently does, I don't fight it anymore knowing that she can afford it and getting a bit of satisfaction that in the end my siblings chipped in for the meal that we just enjoyed.
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